Friday, October 29, 2010

U.S. Slides in Corruption Survey

Iraq and Afghanistan rank near rock-bottom in an index of corruption in 178 countries that found that “nearly three-quarters” of the countries surveyed index showed serious corruption problems.

Iraq ranked 175 and Afghanistan 176 in the global index, just above Burma (Myanmar) and Somalia. These were the same ranks they achieved in 2009.

The United States, while still in the top 20 per cent of the world index, fell from 19th in 2009 to 22nd this year, again failing to score in the top 20. That put it behind Canada, Barbados and Chile in the Americas.

The survey was carried out by watchdog group Transparency International (TI) in Berlin. To form its index, TI compiles surveys that ask businessmen and analysts, both in and outside the countries they are analyzing, their perceptions of how corrupt a country is. Relying on the number of actual corruption cases would not work since laws and enforcement of laws differ significantly from country to country.

Scott Horton, a constitutional lawyer who is a contributing editor to Harper’s Magazine, raised a delicate question in today’s column: “Is being occupied by the United States or receiving massive U.S. government contracts somehow correlated to corruption?”

Chip Pitts, a lecturer in law at Stanford University, at least partly answered Horton’s question. He told IPS, “The association between corruption and authoritarianism and war continues, but we shouldn’t forget that this is a ‘perceptions’ index. More subtle and masked corruption persists in nations like the US, where the role of the military-industrial-surveillance complex in fostering creeping authoritarianism at home and war abroad (in more overtly corrupt countries like Afghanistan and Iraq) is joined by massive, if under-appreciated theft like that in the recent financial bailout.”

He continued: “The publish-what-you-pay provisions in the latest financial reform legislation were a step ahead, but only a small step and still focused mainly on countries abroad. The ‘supply’ side of corruption here in the US (or e.g. in the EU nations and Japan) is also important and should be the subject of dramatically greater investigation, enforcement, and accountability, including against those illicitly profiting from 9/11 fears by incessantly and deceptively pushing the nation into trumped-up and privatized wars, war crimes, torture, ubiquitous surveillance, and airport and mobile bodyscanners. These ‘products’ clearly don’t work to make us safer -- but do add to the already obscene wealth of the merchants of fear, hate, and war.”

In his latest column in Harper’s, Horton wrote, “America is no longer seen as being in the top tier of least-corrupt countries, which includes Western Europe, Australia, and New Zealand. Instead it belongs to the second tier, which includes Eastern and Southern Europe. The index has consistently shown the perception of corruption in the United States as steadily rising. My hunch is that this focuses on government contracting, but the notes released by TI point only to “widespread concern over a lack of government oversight.”

In the Index, Somalia, Afghanistan and Myanmar were found to be perceived as the most corrupt – the same rank as they had in the 2009 survey. And New Zealand, Denmark and Singapore were again seen as having the cleanest governments. Finland, Sweden, Canada, the Netherlands, Australia, Switzerland and Norway completed the top ten.

Huguette Labelle, the former Canadian civil servant who serves as chairwoman of Transparency International, told The New York Times that “the financial crisis and its aftermath had weighed on the United States’ ranking.”

“Bernard L. Madoff’s Ponzi scheme, while not itself attributable to the government, reveals some of the problems that made the crisis possible,” Ms. Labelle said, adding, “People rely on government for early warning signals.” Sometimes the problem is “a lack of regulation or a lack of enforcement.”

“There was a vacuum of enforcement that allowed people to do bad things. The problem is widespread as many countries have regulations on the books but don’t enforce them, either because the state is captured by interests that don’t want them enforced or because regulatory bodies don’t have the resources to do their work.’’

As many as 20 countries in the 36-nation Organization for Economic Cooperation and Development (OECD) convention that bans the bribery of foreign officials show little or no enforcement of the rules, the survey found.

TI said this sent “the wrong signal about their commitment to curb corrupt practices.’’

The TI index is the most commonly used measure for corruption in countries worldwide, though it has received criticisms over the years. The principal criticism stems from the difficulty in measuring corruption, which by definition happens behind the scenes. The index therefore needs to rely on third-party surveys that have been criticized as potentially unreliable.

Data can vary widely depending on the public perception of a country, the completeness of the surveys and the methodology used. The second issue is that data cannot be compared from year to year because TI uses different methodologies and samples every year. This makes it difficult to evaluate the result of new policies. The authors reply to these criticisms by reminding that the index is meant to measure perception and not "reality". They argue that "perceptions matter in their own right, since... firms and individuals take actions based on perceptions".